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Question 10.S-TQ5: Which of the following is the best course of action for a co...

Which of the following is the best course of action for a company that wants to retain funds while still rewarding its shareholders?

(a) Paying a special dividend

(b) Announcing a share repurchase

(c) Paying an increased ordinary dividend

(d) Offering shareholders a scrip dividend

(e) Announcing a share split

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Option (d) is the correct response. If a company wants to retain funds, it can offer shareholders a scrip dividend (share dividend) as an alternative to a cash dividend.

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